Ch3 - Chapter 3 Process Strategy Process Strategy Decisions...

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Chapter 3. Process Strategy Process Strategy Decisions Customer Involvement Process Structure in Services Resource Flexibility Process Structure in Manufacturing Capital Intensity Strategic Fit Strategies for Change
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Process Strategy Process Strategy Principles of process strategy 1. Make choices that fit the situation and that make sense together, that have a close strategic fit 2. Individual processes are the building blocks that eventually create the firm’s whole supply chain 3. Management must pay particular attention to the interfaces between processes
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Process Strategy Process Strategy There are four basic process decisions 1. Process structure 1. What kind of process relative to resources needed 2. How should these resources be arranged (Layout) 2. Customer involvement 1. When 2. How much 3. How specially treated 3. Resource flexibility 1. Variety of products produced 2. Level of output required 3. Number of tasks performed 4. Capital intensity (Equipment versus Human skill)
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Customer Involvement Customer Involvement Advantages Increased net value to the customer Can mean better quality, faster delivery, greater flexibility, and lower cost May reduce product, shipping, and inventory costs May help coordinate across the supply chain Processes may be revised to accommodate the customers’ role Disadvantages Can be disruptive Managing timing and volume can be challenging Quality measurement can be difficult Requires interpersonal skills Layouts may have to be revised Multiple locations may be necessary
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Process Structure in Services Process Structure in Services Customer contact is the extent to which the customer is present, actively involved, and receives personal attention during the service process Face-to-face interaction is sometimes called a moment of truth or a service encounter High Contact Service Process People are processed Customers are physically present Contact is active and face-to-face There is personal attention Low Contact Service Process People’s possessions are processed Customers are absent Contact is passive (e-mail) There is little personal attention
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Ch3 - Chapter 3 Process Strategy Process Strategy Decisions...

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